INDIAN OIL CORPORATION Vs. UJJAL CHOWDHURY

JUDGEMENT

(1.) - On this reference being made to me in terms of Clause 36 of the Letters Patent, upon a difference of opinion between the two learned Judges of this court in the Division Bench hearing the Letters Patent Appeal against the Judgment of the learned single Judge dated 23 April, 1997 whereby a mandamus was issued by the learned single Judge directing the respondents not to give any effect or further effect to the impugned letter dated 6 February, 1997 cancelling the earlier letter of Intent dated 2 April, 1996. On 2nd April, 1996 the Indian Oil Corporation while referring to the application of the writ petitioner with regard to distribution of LPG Dealership in Calcutta conveyed and communicated that it was intended to offer the distributorship based on the terms and conditions contained in the said letter of Intent dated 2 April, 1996. Vide the cancellation letter dated 6 February, 1997 however this letter of Intent was cancelled. The cancellation letter reads as under :- Registered with a/D Ref. No. ER/LPG/202/157 Date : 06.02.97 Shri Ujjal Chowdhury Manickpur Eden Park P.O. Italgacha P.S. Dum Dum Calcutta-700 079. Dear Sir, Sub : LPG distributorship at Baranagar, Calcutta. You have been informed by our Memo. No. 'IND'/124 dtd. 30.5.96 to forthwith stop proceeding with the activities relating to commissioning of the distributorship in terms of the Letter of Intent No. ER/LPG/202/157 dtd. 2.4.96 at Baranagar, Calcutta. We, further, advise you that in accordance with the instructions received from the Ministry of Petroleum and Natural Gas, Govt. of India, the above referred Letter of intent stands rescinded effective from the date of its issue and that the related merit panel prepared by the OSB also stands cancelled. Thanking you, yours faithfully, f/ Indian Oil Corporation Ltd. (MD) Sd/ V. Shukla Dy.general Manager (LPG), ER."

(2.) Learned single Judge, as observed earlier quashed and set aside the aforesaid rejection order and issued a mandamus upon the respondents not to give any effect or further effect to the same. Aggrieved, the appellants filed an appeal under Clause 15 of the Letters Patent. The Division Bench comprising of R. Dayal and Amitabha Lala, JJ. however dissented in their findings and opinion with regard to legality of the cancellation of the letter of Intent and the issuance of the cancellation Order. Whereas R. Dayal, J. was of the view that the cancellation Order did not suffer from any arbitrariness and that for enforcing the Model Code of Conduct for the then ensuing Elections the Government was well within its rights to issue the cancellation Order. Amitabha Lala J. by his dissenting judgment held that the letter of Intent has created in the writ petitioner an equitable right and such a right standing on the periphery of the contractual right, the action of the executive authority must be subject to Rule of Law. He accordingly held that the cancellation order suffered from arbitrariness. It is in these circumstances that this reference has been made to me for resolving the difference of opinion between the two learned Judges of this court.

(3.) There are two aspects which require adjudication and which are relevant for deciding the issue of arbitrariness. One is, as to whether the letter of Intent was cancelled because of the coming into force of the Model Code of Conduct following the announcement of the Elections and the second is, whether the Office Memorandum dated 22 October, 1996 could be given retrospective effect in so for as the negative consequence regarding the preparation/submission of the selection panel by the Oil Selection Board (OSB) was concerned.